Corporate Social Responsibility in the USA

Introduction

            Currently, most of the companies recognize the need for corporate social responsibility regardless of their size or nature of business. However, among most of the largest corporations, CSR comprises an integral part of their operations, depicting their commitment to the society. In addition, perceptions toward CSR have changed leading to investments in the sector, rather than viewing it as a liability on the corporation’s resources. Corporate Social Responsibility entails the continued commitment by the corporation to engage in ethical business practices, contribute to the development of the economy, and improve the quality of the employees’ lives, life of their families, and the surrounding society. In recent survey, researchers agree that CSR has shifted from the traditional focus on charity to focus on employment, health, environment, education, and other forms of empowerment. The main objective of this paper is to provide a critique on the practice of CSR in the United States of America.

The state of CSR in the United States

            In the late 1960s and early 1970s, the federal government passed to address the rising concerns related to the society, and the environment. The government formulated and implemented laws to control the level of pollution because of hazardous wastes, workplace legislation, and consumer protection among others. Companies incorporated or operating in the United States worked toward meeting the set requirements. However, the government failed on stipulating the guidelines that those companies would use while reporting their performance to the members of the public. The federal government of the United States does not lay stringent regulations on their companies as opposed to companies in other developed countries. In the United States, corporate responsibility is not treated as a regulatory compliance issue but as moral and social choice. The perception explains the practices carried out by some of the United States’ firms based in other countries. For instance, the use of the CSR reports by the Exxon after the case of oil spills, and Nike after the accusation for encouraging child labor in Asia. In addition, the government had no sufficient regulations on reporting that ensured consistency and comparability, hence a mere representation of marketing campaigns full of biases.

            Most of the firms in the United States disclose their information just to meet the demands of their shareholders. Such a practice depicts that the federal government is still reluctant on the issue of CSR reporting. There exist some socially responsible investments that include the Fortunes and Dow Jones among others. On average, socially responsible investments represent approximately 10% of the total investments in the country. Research explains that most of the financial markets and fund managers in the United States implement the internationally accepted standards at such a slow pace, hence affecting the reliability of the reports released by those companies. Approximately 220 facilities are certified by the SA800 with only 2 companies from the United States as compared to 23% from the European Union. Research also highlights that of the approximately 40,000 companies following the ISO 14001 reporting standards, 5% are from the United States as compared to 43% from the European Union. The gross domestic product of the United States is approximately three times higher than that of the European Union. Considering the United States’ GDP, the information provided depicts that companies in the European Union take significant considerations on the corporate social responsibility as opposed to companies in the United States.

            Conservatives in the United States expressed that over regulations on CSR could negatively affect the financial markets on their policies on disclosure. The fear to adopt and implement the regulations led to the country’s failure to fully implement the environmental regulations agreed in  1997 leading to the abandonment of the treaty. Failure to implement the treaty signed in 1997 at Kyoto led to unethical practices and reporting by some corporations such as the Microsoft. On the Microsoft’s CSR report released in 2008, the environmental stewardship section highlighted four aspects in relation to the environment. However, the Corporation failed to disclose details of the emissions of greenhouse gases in relations to the operations of the organization. In addition, the report failed to give a discussion on the measures the Corporation would implement to reduce the emissions. Failure by the federal government to provide stringent guidelines on reporting leads to omission of important issues in the reports. Otherwise, corporations involved should ensure accessible, transparent, and comprehensive reporting on serious issues related to the corporation but affecting the society directly or indirectly.  The abandonment of the Kyoto Treaty of 1997 by the United States depicts another example of the country’s egocentricity.

            Although Americans argued that the Kyoto regulation is unfair unless implement in the entire world, the move is evidence that the United States seeks to maintain its perfect market economy without concerns for humanity. The truth is that companies in the United States are not obliged to the requirement of the CSR despite the expectations of stakeholders to get involved in sustainable practices. Consequently, most of the United States-based firms find it easy to define and interpret views of responsible practices within their own context. The move has led to most of them implementing and promoting activities with greater freedom as compared to international corporations in other developed countries. Companies in the United States normally lack a clear definition and guidelines on corporate social responsibility. The lack of guidelines and definition leads to confusion on the aspects of CSR that range from investments in the community, corporate citizenship to social responsibility, and sustainability.

Works Cited

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